Goss v. Bisset
411 S.W.2d 50, 1967 Ky. LEXIS 458 (1967)
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Rule of Law:
A lease provision stating that 'all improvements and fixtures' become the lessor's property includes trade fixtures. However, abandoned personal property on leased premises belongs to the first taker or finder, whose right is superior to that of the landowner, as possession itself creates rights against all but the true owner.
Facts:
- On April 1, 1951, Rose Burke Bisset leased a commercial garage building and an unimproved lot in Paris, Kentucky, to Briggs Motor Company for an 8-year term.
- The Briggs Motor Company lease contained a provision stating, 'All improvements and fixtures made to and located in said building or upon the lots shall become the property of the lessors exclusively.'
- Between 1955 and 1956, Briggs Motor Company assigned its lease to Delaney, Inc., and Chic Goss later became a one-third owner of Delaney, Inc.
- In 1958, Chic Goss bought out the other owners of Delaney, Inc., becoming the principal stockholder, changed the company's name to Chic Goss, Inc., and continued as tenant under the existing lease.
- From April 1, 1959, to March 31, 1961, Chic Goss, Inc. entered into a new lease with Mrs. Bisset for the same premises, which included the identical provision regarding fixtures.
- During the term of the Bisset lease and until April or May 1961, Chic Goss, Inc. occupied and used the Bisset property, along with an adjacent Lovell Building (rented from another party), for an automobile dealership and repair service.
- Various items of property, including an air compressor, neon fixtures, workbenches, and a window fan, were placed in or on the Bisset property by predecessor tenants or Chic Goss, Inc. (some were later moved to the Lovell Building).
- After Chic Goss, Inc. vacated Mrs. Bisset's premises, Mrs. Bisset took possession of several items of property, claiming ownership under the lease's fixture provision.
Procedural Posture:
- Rose Burke Bisset initiated a claim and delivery action against 'Chic Goss, President and Process Agent of Chic Goss, Incorporated,' seeking possession of several items of property.
- Chic Goss personally answered, stating the property belonged to Chic Goss, Inc., and counterclaimed for the value of a window fan.
- Chic Goss, Inc. was permitted to file an intervening complaint against Mrs. Bisset, asserting ownership of all property and demanding damages for wrongful detention.
- Mrs. Bisset denied the counterclaim and, in her answer to the intervening complaint, cited a written lease provision to claim ownership of all property as 'improvements and fixtures'.
- The trial court, after hearing evidence without a jury, found that neither Mrs. Bisset nor the corporation had proved ownership of any property except that which passed to Mrs. Bisset by the lease terms, that the window fan belonged to Mrs. Bisset under the lease, and that remaining items should stay in Mrs. Bisset's possession 'for a reasonable length of time'.
- Chic Goss and Chic Goss, Inc. (appellants) appealed the trial court's judgment to the Court of Appeals of Kentucky.
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Issue:
Does a lease provision stating that 'all improvements and fixtures' become the lessor's property include trade fixtures, and who is entitled to possession of non-fixture personal property (like abandoned items) left on leased premises after a tenancy?
Opinions:
Majority - Palmore, Judge
Yes, a lease provision stating that 'all improvements and fixtures' become the lessor's property does include trade fixtures, and the first taker or finder acquires absolute property in abandoned chattels found on the premises, superior to the landowner. The court reasoned that a lease provision concerning fixtures would be 'superfluous and meaningless' if it did not encompass trade fixtures, which are typically removable by tenants absent an agreement. Regarding other personal property, the court determined that items intentionally left by a prior tenant after vacating, without returning for them, are presumed abandoned, not mislaid. Abandoned property becomes subject to appropriation by the first taker or finder, who acquires absolute property therein, even against the landowner, because possession itself generates rights against all but the true owner. Mrs. Bisset never had actual or constructive possession of non-fixture personal property; rather, possession passed directly between tenants. The court distinguished 'mislaid property' (owner intends to retrieve) from 'abandoned property' (owner relinquishes all rights), concluding the items were abandoned. The case was also distinguished from precedents like Silcott v. Louisville Trust Co. because there was no comparable duty of care (like a bank) and the premises were not under the lessor’s control when possession transferred. The court then specifically classified various items, ruling that 'fixtures' (e.g., specific neon lights, gas heaters, a furnace, and sign standards) belonged to Mrs. Bisset under the lease, while 'chattels' (e.g., extension cords, spotlights, work benches, an air compressor, and a window fan) belonged to Chic Goss, Inc. or Goss individually by virtue of prior possession.
Dissenting - Osborne, Judge
No, the trial court's findings regarding ownership of the items as per the lease and the lack of proof of ownership by the tenant should have been affirmed, as appellate courts should not re-try cases or disregard factual findings. Judge Osborne contended that the trial court, having heard the matter without a jury, made proper findings of fact and conclusions of law, which should not have been disturbed by the appellate court unless clearly erroneous or manifesting an injustice. He argued that the majority opinion disregarded the principle that findings of fact by a judge trying a case without a jury are presumptively correct and that appellants bear the burden of clearly showing error. The dissenting judge cited Story v. Brumley and other cases to emphasize that appellate courts have appellate jurisdiction only and should not act as if they are the original trial court. He further criticized the majority for discussing common law forms of action like 'Trover and Replevin' under modern Civil Rules of Procedure, where only one cause of action exists, deeming it unhelpful.
Analysis:
This case provides crucial guidance on interpreting 'fixture' clauses in commercial leases, clarifying that such clauses typically extend to trade fixtures, unless explicitly stated otherwise. It also reinforces fundamental principles of property law concerning abandoned versus mislaid property, firmly establishing that the first taker/finder of abandoned chattels generally has superior rights of possession over the landowner, especially where possession has passed directly between successive tenants. The ruling underscores the significance of precise contractual language in leases and highlights the common law's respect for possession as a source of legal rights against all but the true owner, influencing how landlords and tenants manage property at the end of a lease term.
